Analysis of Big Tech Stock Prices

INFO 523 - Spring 2023 - Project 1

Tech Titans: Christian Ortmann, Roxana Akbarsharifi, Abhishek Kumar, Shashank Yadav, Gorantla Sai Laasya, Divya Liladhar Dhole

Introduction to the Dataset

  • Data was sourced from the Tidy Tuesday website, which was originally pulled from Kaggle.
  • Dataset consists of 14 Big Tech stocks and their respective financial metrics (Open, High, Low, Close) from 2010 to 2022
  • Contains some missing data points where companies were listed after 2010
  • Motivated to make low risk financial decision by analyzing past stock market trends

Question 1: How do stock prices change over time based on basic financial metrics?

Each bar contains a candlestick plot which depicts the Open, High, Low, Close prices for Stocks

Line Plot and Bar Plot

Analysis

  • We analyzed the Compounded Annual Growth Rate (CAGR) for the stocks.
  • We also analyzed how much a stock corrected from it’s peak during first 6 months of Covid-19.
Company %CAGR between 2010-2022
TSLA 41.51
NFLX 32.37
NVDA 30.47
AAPL 24.36
AMZN 21.53
ADBE 18.54
MSFT 17.13
CRM 16.28
GOOGL 14.25
META 13.15
ORCL 9.57
CSCO 5.17
INTC 1.77
IBM 0.83
Company %Correction
IBM -56.08
TSLA -44.47
CSCO -42.80
INTC -34.84
META -34.59
ORCL -33.83
CRM -33.05
NVDA -32.12
AAPL -30.82
GOOGL -28.99
NFLX -28.67
MSFT -21.62
ADBE -20.10
AMZN -17.79

Insights

  • All 14 stocks have a positive CAGR (compounded annual growth rate) over the twelve year period, with TESLA stock being the leader with 41.51% CAGR.
  • Each company’s share price dropped by at least 15% during first 6 months of Covid-19, with IBM being the worst with a fall of over 56%.
  • Apple (AAPL) is the most popular stock based on trading volume.

Question-2 Backwards verification: if we invested x amount of dollars in 2010, how much would it be worth in 2022, when would be a good/bad time to pull investment out of the market

  • To answer this question we looked at normalized prices for each stock and simple moving average analysis.

Insights

  • From January 2012 to January 2022, Tesla’s stock price experienced significant growth and multiplied investments by 10x. At the beginning of this period, in January 2012, the stock price stood at 11.25, while by January 2022, it had surged to 2,412.”
  • Simple moving average suggested that whenever the 50-day daily moving average (DMA) crosses above the 200-day moving average (DMA) during an uptrend, the stock rises, and when the 50 DMA crosses below the 200 DMA during a downtrend, the stock declines. This pattern has been observed in TESLA stock among others.
  • Netflix (NFLX) is another example where we observed this pattern of 50-200 DMA crossover.

Conclusion

  • Out of the 14 companies, 5 companies (TSLA, NFLX, NVDA, AAPL, AMZN) showed a compounded annual growth rate greater than 20%.
  • Simple Moving Average based analysis can suggest the movement of stock prices based on crossovers and may suggest when to Enter and Exit a stock.
  • Apple’s (AAPL) stock price trade volume is greater than 150 % more than the most popular stock trade of Tesla (TSLA)

Thank You!